Regional View: Costly question on Mo. tax cut bill

Tuesday

Apr 29, 2014 at 6:00 PM

An editorial by the GateHouse Northern Missouri newspapers.

Editorial

Yet another tax reform debate is heating up in Missouri, and yet again the debate is centering on unintended consequences of the legislation. Senate Bill 509 aims to accomplish much of what House Bill 256 aimed to do a year ago, giving small income tax cuts to Missourians while also establishing a large tax deduction for business owners.

The HB 256 conversation ended poorly for Republicans. Their bill, while cutting taxes, also sought to raise taxes on pharmaceutical drugs and textbooks. Missouri schools and mental health providers said the bill would be devastating. Gov. Jay Nixon vetoed the bill and the Legislature failed to override that decision.

Now, it seems SB 509 could contain an even more disastrous consequence. Section 2.4: “The bracket for income subject to the top rate of tax shall be eliminated once the top rate of tax has been reduced to five and one-half of a percent.”

Gov. Nixon has seized on this as something that would destroy state services by eliminating income taxes for 97 percent of Missourians, wiping out 65 percent of the state’s general revenue and costing $4.8 billion annually. Republicans disagree, saying that is not how courts would interpret the bill and the governor is doing nothing more than utilizing scare tactics.

At the very least, there is a question hanging over the legislation - a $4.8 billion question.Whether this tax reform bill is a good idea for Missouri can’t be the debate at this point. A bill with this kind of potential error needs to be addressed. We urge lawmakers to head back to the drawing board. We can’t afford that level of confusion.